Mobile Satellite Services in Europe:
Frequently Asked Questions

Today the Commission launched a call for candidate
operators of pan-European mobile satellite services that takes place for the
first time under a single EU-wide selection mechanism. This new mechanism will
give industry the necessary confidence to invest in EU-wide services, even in
previously uneconomic remote areas. It could allow companies, as of 2009, to
offer innovative wireless services to consumers throughout Europe.

What is a mobile satellite service?

A mobile satellite service (MSS) is a service provided by a satellite system
which communicates with portable terminals on the ground, which can be mounted
on a ship, airplane, or car or carried by a person. Such systems allow
high-speed communication throughout Europe between satellites and, for instance,
handheld mobile terminals comparable to smart mobile phones or portable
computers.

Mobile satellite services themselves can range from high-speed internet
access to mobile television or radio, and public protection and disaster relief.
Another well-known example is portable satellite telephones that allow phone
calls to be made and received anywhere in the world.

What are mobile satellite service systems?

Systems providing mobile satellite services use radio spectrum to provide
services between a mobile earth station and one or more stations either in space
or on the ground at fixed locations.

The radio spectrum is divided into "bands", i.e. ranges of frequencies.
Systems providing mobile satellite services have been allocated the 2 GHz
frequency band throughout the European Union, comprising radio spectrum from
1980 to 2010 MHz for Earth to space communications, and from 2170 to 2200 MHz
for space to Earth communications. This allocation has been done by means of a
Commission Decision adopted on 14 February 2007:

Satellite communications, by their very nature, cross national borders and
are thus susceptible to international or regional regulation. An efficient way
of ensuring the coordinated introduction of mobile satellite systems in the EU
is to organise a single selection and authorisation process of operators for all
Member States. This includes assigning the same spectrum to operators in each
Member State, so that they can provide their satellite services at a
pan-European level.

At present, existing regulations of the International Telecommunications
Union (ITU) have only procedures for radio frequency coordination to avoid
unacceptable interference between satellite systems. They do not extend to the
licensing of those systems.

The European Commission therefore intervened to create a "one stop shop" to
facilitate the emergence of a single market for mobile satellite services and
maximise its potential, to the benefit of businesses and consumers.

How are the market opportunities for mobile satellite services? How does
Europe compare to other parts of the world?

The satellite industry is a €77 billion market worldwide, growing at
16% in 2007. The economic impact of satellite services is growing: in 2007 they
generated approximately €38 billion in revenue which is about 60% of the
global revenue of the satellite industry, and 18% more than in 2006 (Furton
Corporation, 2008).

Generally speaking, European companies represent an important force on this
market: the European space industry holds 40% of world markets for
manufacturing, launching, and operating satellites.

In the field of mobile satellite services, Europe has room for improvements
when compared to other parts of the world: while Japanese and Korean consumers
already enjoy many radio or TV programmes on their mobile phones, in Europe
mobile radio or television services are not yet provided over satellite systems.
This should change with the new EU-wide selection mechanism.

What has the Commission done so far?

Previously the European Commission adopted in February 2007 a Decision
reserving the 2 GHz radio frequency bands for use by systems providing mobile
satellite services. However, that Decision did not cover procedures for the
selection and authorisation of the actual operators of such systems, which was
left to the relevant national authorities: http://ec.europa.eu/information_society/policy/radio_spectrum/ref_documents/.

On 22 August 2007 the Commission proposed to add a single EU-wide selection
and authorisation procedure for operators that want to offer EU-wide mobile
satellite services.

The Decision
on this EU-wide selection and authorisation procedure was adopted by the
European Parliament and Council on 30 June 2008 and entered into force on 5 July
2008. Today's call is based on this Decision.

What are the next steps?

The deadline for interested companies to submit their applications to the
Commission is 7 October 2008.

The selection procedure comprises two phases.

During the first phase technical and commercial ability of the candidates to
launch their systems in time will be assessed using five pre-defined milestones.

If more candidates pass the first phase than could be accommodated within the
spectrum available, they shall be assessed in the second selection phase against
the following four selection criteria: consumer and competitive benefits
provided (20 % weighting), spectrum efficiency (20 % weighting), pan-EU
geographic coverage (40 % weighting) and the extent to whichpublic
policy objectives, not dealt with by the other criteria, are achieved (20 %
weighting).

The credibility of applicants and the viability of the proposed mobile
satellite systems will be taken into account throughout the process. The
procedure will be concluded by a Commission Decision selecting the successful
candidates. All Member States will have to make sure that selected candidates
have the right to operate in their country.

Depending on the number of candidates, the Commission expects that the
selection procedure can be completed in the first months of 2009. First
satellite launches could take place already in 2009 but the deadline for the
deployment of commercial services is 2011 at the latest.

The costs of producing and launching a satellite can run to hundreds of
millions of euro, and satellite operators have to pay them before any revenue
can be generated from the use of the satellite in question. Investment on such a
large scale can only be undertaken by relying on a stable legal environment
making sure that satellite operators will be able to offer mobile satellite
services across Europe throughout the life-time of the satellite.

Who can apply?

Any mobile satellite services operator established in the EU can apply.

Where will the services be deployed?

Services have to cover at least 60 % of the EU's territory as of the date the
services commence. Coverage of all Member States is required at the latest seven
years after the selection decision. In addition, the geographical coverage is
one of the criteria that will be assessed in the selection process. It is
obviously in the operator's interest to reach as many potential customers as
possible by serving an area as wide as possible.

How many services could there be potentially?

The number of services to be provided by the selected systems is not
determined at the moment. Many industry players are seriously interested in
being selected to provide a number of services over the 30 MHz available for
uplink and downlink, but the eventual number of selected systems will partly
depend on the frequency capacity they require. However, the selected systems
themselves are generally expected to be capable of carrying a variety of mobile
satellite services depending on spectrum efficiency options and business models.

For instance, emergency communications and mobile television services can
potentially sit on the same system. Besides the number of services, the
potential number of users is expected to be important, as satellite systems
typically have a much wider geographical coverage area than other types of
communication networks.

Will the selected candidates receive a "European licence" and pay a
"European licence fee"?

No. Only the selection of the operators of systems of mobile satellite
services will be made at European level. Operators will be "licensed" or
"authorised" by each Member State, subject to a number of harmonised
authorisation conditions. In other words; there is now a "European template" for
decisions that continue to require implementation at national level.

If there are fees, these will thus be determined nationally. Any fee must be
justified, transparent, non-discriminatory and proportionate to the intended
purpose.

Who will benefit?

Operators will benefit directly from economies of scale which will result
from consistent national authorisations across the EU. It will encourage
investment in the sector thanks to the transparency and legal certainty offered
by this consistent EU approach.

Businesses and citizens will also benefit from the high speed services that
will be offered by operators such as: high speed internet access, mobile TV
services, emergency services, etc.

Mobile satellite systems also open up new geographical areas to services that
were once considered too expensive to reach. This in turn, should energize local
economies and help close the digital divide. In all, the market for space
and its applications is €77 billion globally. It was growing at an average
annual rate of about 16% in 2007 (Furton Corporation, 2008). When it comes to
systems providing mobile satellite services, the new technological developments
allowing them to be complemented by ground components are likely to increase the
importance of such systems as compared to previous mobile satellite service
systems.